Walmart trimmed its quarterly and annual earnings guidance, noting that inflation is causing shoppers to spend more money on basic and essentials like food rather than buying clothes and electronics.
This shift in spending behavior has left more goods on store shelves and in stores — forcing the retail giant to slash prices for products customers don’t want, sending the company’s stock plummeting more than 8%, noteingthat the shares of other retail companies also declined, including Target and Amazon. Read More [Walmart Buys About 4,500 Electric Vehicle From Canoo].
Walmart now expects adjusted earnings per share for the second quarter to decline by 8-9% and for the full year by 11-13%, compared to its previous forecast of a flat or slightly increase in second-quarter earnings with only a 1% drop in full-year earnings, It is worth noting that Target has also trimmed its second quarter guidance. To read more [Target Profits Expected to Drop Due to Stock Disposal].
Inflation has reached its highest level in four decades, as consumers are facing unusually high prices in gas stations, in grocery stores and even restaurants, so some people prefer to choose only basic expenses and reduce some other expenses. Read More [Walmart’s First-Quarter Results Hurt Costs and Supply Chains].
On the other hand, as consumers continue to buy more food and staples from its stores, Walmart expects year-old sales in the US to increase by 6% in the second quarter excluding fuel, which in turn is higher than the company’s previous expectations of sales growth. By 4-5%.